GuruFocus -
- Contribution ex-TAC: $85.5 million, 12% growth from Q3 2023.
- Programmatic Revenue: $81.6 million, 10% growth from Q3 2023.
- CTV Revenue: $29.7 million, 52% growth from Q3 2023.
- Adjusted EBITDA: $31.6 million, 49% year-over-year increase.
- Adjusted EBITDA Margin: 37% of contribution ex-TAC, up from 28% in Q3 2023.
- Net Cash from Operating Activities: $39.9 million, over 3x increase year-over-year.
- Net Cash: $166.5 million as of September 30, 2024.
- Non-IFRS Diluted Earnings per Share: $0.14, up from $0.09 in Q3 2023.
- Share Repurchase: 5.1 million ordinary shares repurchased, $18.3 million investment.
- Full Year 2024 Guidance: Contribution ex-TAC $340-$345 million; Adjusted EBITDA approximately $107 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nexxen International Ltd (TTTPF) achieved record Q3 results, with a 12% growth in contribution ex-TAC compared to Q3 2023.
- The company has successfully integrated Amobee's technology, enhancing its data assets and talent base, which has improved its market standing.
- Nexxen's CTV revenue grew by 52% year-over-year, driven by strong sales execution and strategic partnerships.
- The company has developed a robust data platform, including a unified ID graph solution, which enhances targeting and attribution capabilities.
- Nexxen is actively incorporating GenAI into its platform, aiming to improve usability and customer returns through advanced AI capabilities.
- Nexxen observed a year-over-year decrease in its travel vertical, indicating potential challenges in this sector.
- Despite strong CTV growth, the company faces competition from single-sided platforms like The Trade Desk (NASDAQ:TTD), which have shown higher growth rates.
- The company's political contribution ex-TAC, while a record, is not considered a significant revenue driver.
- Nexxen's transition to a NASDAQ-listed ordinary share structure may involve complexities and potential challenges in attracting US investors.
- The company acknowledges the need to potentially transition from IFRS to US GAAP, which could involve additional costs and adjustments.
A: Ofer Druker, CEO: We present our Discovery tool as the entry point for new advertisers. This tool, acquired through Amobee, integrates multiple datasets to help advertisers learn about audiences, create and activate them on our platform, and measure results. It simplifies the process by allowing advertisers to upload and enrich their data with our datasets, such as TV data, enhancing campaign insights and effectiveness.
Q: Can you elaborate on the strong growth in CTV and whether political contributions played a role in Q3?
A: Ofer Druker, CEO: Political contributions were part of the growth but not the major driver. Our growth stems from our strong CTV technology developed over five years, increasing publisher partnerships, and the LG settlement, which expanded our media reach. The market's improved condition also contributed to increased CTV spending.
Q: Why do you believe end-to-end platforms have an advantage, given that single-sided platforms like Trade Desk are growing faster?
A: Ofer Druker, CEO: End-to-end platforms offer efficiency, privacy, and data synchronization advantages. Our fully functional DSP and SSP, connected to our DMP, provide unique capabilities. While single-sided platforms are growing, many are moving towards end-to-end solutions. Our platform's ability to integrate GenAI and machine learning across the supply chain enhances our competitive edge.
Q: Are there plans to move from IFRS to US GAAP with the potential delisting from offshore exchanges?
A: Sagi Niri, CFO: Yes, we are considering moving to US GAAP as we may lose our FPI status. This transition would help us gain inclusion in more indices and align with US-listed companies.
Q: What changes have led to improved sales execution, and how does this impact your investment priorities?
A: Ofer Druker, CEO: Post-Amobee acquisition and rebranding, we've sharpened our market message, aligning our sales team with our offerings. This clarity has improved sales execution. Our investment priorities focus on enhancing our tech stack and sales materials to drive better results.
Q: How do you view the seasonality from Q4 to Q1, considering political contributions?
A: Sagi Niri, CFO: Q1 is typically softer than Q4. However, our growth drivers, such as AI and GenAI investments, will continue to drive revenue. We expect Q1 2025 to outperform Q1 2024, focusing on execution and leveraging our capabilities.
Q: Can you update us on potential commerce media partnerships following the United partnership?
A: Ofer Druker, CEO: We have a healthy pipeline of potential partnerships. Our strong DMP, data enrichment capabilities, and media reach make us attractive to commerce media clients. We are actively pursuing opportunities to expand these partnerships.
Q: Any early indications of demand from The Trade Desk partnership, and when might it contribute to results?
A: Ofer Druker, CEO: The partnership with The Trade Desk is building traction, starting in Australia. We aim to expand globally, aligning with their strategy. While it's early, we expect it to contribute to results as we open more markets together.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.